19400411_1000a_Minutes.pdf

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A meeting of the Board of Governors of the -.'ederal Reserve

SYsten was held in Vashington on Thursday, April 11, 1940, at 10:00 a.m.

PRESENT: Mr. Ransom, Vice ChairmanMr. SzymczakMr. McKeeMr. DavisMr. Draper

Mr. Bethea, Assistant SecretaryIr. Clayton, Assistant to the Chairman

The action stated with respect to each of the matters here-

inafter referred to was taken by the Board:

The minutes of the meeting of the Board of Governors of the

Federal Reserve System held on April 10, 1940, were approved unan-

14Iously.

Letter to the board of directors of the "Lgg Harbor City

TrIlst Company", Egg Harbor City, Nev. Jersey, stating that, subject to

e0401itions of membership numbered 1 to 6 contained in the Board's

Regulation H and the following special condition and comment, the

13°8'11d aPproves the bank's application for membership in the Federal

Reserve System and for the appropriate amount of stock in the Federal

leserve Bank of Philadelphia:

"7. Such bank shall make adequate provisionfor depreciation in its banking house and furnitureand fixtures."

"It appears that the bank possess certain oowerswhich are not being exercised and which are not nec-essarily required in the conduct of a banking andtrust business, such as the powers to act as suretyand to guarantee title to land. Attention is invitedto the fact that if the bank desires to exercise anyPowers not actually exercised at the time of admis-sion to membership, it will be necessary under con-dition of membership numbered 1 to obtain the

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"permission of the Board of Governors before exer-

cising them. In this connection, the Board under-

stands that there has been no change in the scopeof the corporate cowers exercised by the bank since

the date of its application for membership."

Approved unanimously, together with aletter to Mr. Sinclair, President of the -Fed- •

eral Reserve Bank of Philadelphia, reading asfollows:

"The Board of Governors of the Federal Reserve

System approves the application of the Egg HarborCity Trust Company, Egg Harbor City, New jersey, formembership in the Federal Reserve System, subject tothe conditions prescribed in the enclosed letter whichyou are requested to forward to the Board of Directorsof the institution. Two copies of such letter are alsoenclosed, one of which is for your files and the otherof which you are requested to forard to the Commis-sioner of Banking & Insurance for the State of NewJersey for his information.

' "The Board understands that your office has givenfull consideration to the question of management, andto the conditions imposed with respect to management inconnection yith the recent absorption of the other bankin Egg harbor City, and that the situation will receivecareful supervision until the ability of the managementhas been demonstrated.

"It is assumed, of course, that your office willfollow to a conclusion the appointment of a trust of-ficer and designation of a trust committee, and alsofollow the matter of bringing the savings accountslisted on page 16 of the report of examination intoconformity with the Board's regulations.

"Since the amount of estimated losses classifiedin the report of examination for membership is relativelysmall, the usual condition of membership regarding theelimination of losses has not been prescribed. It hasbeen noted, however, that the amount classified will becharged off by the bank."

Letter to the board of directors of "The Kraft State Bank",

14e11°Monie, Wisconsin, stating that, subject to conditions of member-

4113 numbered 1 to 6 contained in the Board's Regulation H and the

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following special conditions and comment, the Board approves the

bElnk's application for membership in the Federal Reserve System and

for the appropriate amount of stock in the Federal Reserve Bank of

Minneapolis:

"7. Such bank shall mnke adequate provisionfor depreciation in its banking house and furnitureand fixtures.

"8. Prior to admission to membership, suchbank, if it has not already done so, shall chargeoff or otherwise eliminate estimated losses of 55,as shown in the report of examination of such bankas of March 4, 1940, made by an examiner for theFederal Reserve Bank of Minneapolis."

"The report of examination for membership con-tains numerous criticisms of the operations andsupervision of the trust department and it has beennoted that there has been no formal appointment of atrust officer or designation of a trust committee.Acceptance of trust business, no matter how small,entails serious responsibilities, and if the bank isto continue to accept trust business it will be ex-pected to take appropriate steps to fix the respon-sibility therefor and to equip itself to handle thebusiness in conformity with recognized principles ofsound fiduciary practices."

Approved unanimously, together with aletter to Mr. Peyton, President of the Fed-eral Reserve Bank of Minneapolis, reading asfollows:

"The Board of Governors of the Federal ReserveSystem approves the application of The Kraft StateBank, Menomonie, Wisconsin, for membership in theFederal Reserve System, subject to the conditionsprescribed in the enclosed letter which you arerequested to forward to the Board of Directors ofthe institution. Two copies of such letter arealso enclosed, one of which is for your files andthe other of which you are requested to forward tothe Commissioner of Banking for the State ofWisconsin for his information.

"The papers submitted with the application didnot include a copy of the form of capital debentures

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"which the bank has outstanding to the ReconstructionFinance Corporation, and it will be appreciated ifyou till forward such a copy to the Board for itsrecords."

Bond in the amount of10,000 executed under date of April 2,

1940, by Mr. Raymond C. Force as Federal Reserve Agent at the F d-

el'al Reserve Bank of San Francisco.

Approved unanimously.

Thereupon the meeting adjourned.

Assistant Secretary.

APProved:

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